202112 Jan
Understand the Power of Variable Costs - Solutions360 ERP Software
Type
General News
Companies
Source
Solutions360
Summary

This is Part 1 in our new blog series from Joel Harris, which explains the power of variable costs for your integration business. My company had acquired a failed roll-up with a national footprint, with great customers and good revenue for its size. My company took two actions that turned this loss into a multimillion-dollar profit in the first year post-acquisition: • First, we eliminated all fixed costs that were not essential to the providing existing customer services. While the above scenario or solution may not directly apply to your business, the principles of reducing fixed overhead costs and making your direct costs truly variable will unlock a hidden treasure of profitability with no change in your existing revenue stream. Stay tuned for Part 2 in this series, when Harris does a deeper dive with examples of where a variable cost structure adds profitability to your integration business.

Classifications
  • ERP
  • ERP & Process Management
  • Procurement & Purchasing
  • Professional Services Automation
  • Accounting and Taxes